How to budget

People frequently tell me they would like to start budgeting but they are not sure how to budget or where to start. Here are some guidelines which will be useful for anyone who wants to make a personal budget or a household budget. We have included a free budget worksheet and several tips on how to budget and how to save money.

The initial stage of budgeting is to track your expenses and see where your money is going. The next stage is to see what you can cut from your spending, and the final stage is to build a budget for the future and keep to it.

Here are the guidelines for stage 1:

What are you earning?
What you earn will play a major factor in what you have to spend in your budget.

- be conservative
– it is always better to play it safe, and have money left at the end
- if you have a variable income take an average from the last few months.
- Include income from other sources i.e passive income or income from property

Make a note of the figure which you will need later in the budgeting process.